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Friday, May 28, 2010

Gender Inequality: An Explanation for Unethical Business Behaviour?

Over the last few weeks, the topic of Gender Equality has been seen in a number of popular media outlets. It was the central theme of The Clinton Global Initiative in New York a couple of weeks ago and Ted.com had a couple of very powerful speakers on the topic. Although I’m not in any way an expert, I’m intrigued by the history and effects of gender inequality when understanding some of the behaviours of business today and the winds of change characterizing business.

A few management scholars and practitioners have lumped gender equality or, more generally, diversity in the workplace under the broader sustainability umbrella, specifically in the social pillar of the triple bottom line. JP Morgan has a whole leadership program to increase the number of positions for women while Goldman Sachs has a “10,000 Women” investment initiative meant to help 10,000 women get business degrees around the world.

“We have to do whatever it takes to attract the best people….you can accomplish a lot of your personal objectives and the world’s objectives through the platform of Goldman Sachs”. (CEO, Goldman Sachs).

Is gender equality good for business then?

Calling herself a social venture capitalist, Kavita Ramdas leads The Global Fund for Women and explains that investing in equity guarantees more efficient outcomes. She explains that women have a very different sense of purpose when compared to their male counterparts, the product or at least balance of which can be very lucrative to the firm. A recent study found that banks with women in at least 30% of the leadership positions had much lower risk rates and lower rates of bad loans than were made in other banks. Clearly, firms that have employees and key decision-makers who share the same gender as 50% of its customer base generate important knowledge and perspective on how to tap into that market more effectively. What is more, ensuring gender equality affords companies access to a broader labour pool through which to achieve organizational objectives. And because gender inequality has attracted a wide range of individuals, groups, and organizations eager to facilitate change, consumer decisions are increasingly made by women. Can a male-dominated organization adequately target these new decision-makers?

Of course, businesses frame gender equality from an instrumental perspective, working to understand how ignoring or tending to this issue positively and negatively impacts their bottom line. But when we dig a bit deeper, we begin to understand some more provocative relationships between business today and gender equality.

The Wall Street Journal published an article recently trying to understand why women haven’t been as successful as men in business (bear in mind that success is rather narrowly defined in the article as growth). I was a bit surprised by the author’s two reasons put forward. One reason was the stereotypes, perceptions, and expectations of business and government leaders. The other was that women have “self-limiting views of themselves, their businesses and the opportunities available to them”. Notice that the limitations flagged in this second reason is that of the subject (women) rather than the object (business). Another way to look at this is to argue that how we define success in business today is not conducive to women. In other words, perhaps women just aren’t interested in achieving society’s definition of success in business in the same way that men are.

I’m reminded of the Hollywood film “The Da Vinci Code” where one of its underlying messages is that events and how decisions are made over the course of a period of time can have dramatic and sustained impacts in the future. If there is any truth that today’s society marginalizes women partly because of the decisions made thousands of years ago then we can perhaps argue two things. First, such marginalization may have led to the unfolding of the industrial revolution without adequate women representation. Second, we live in a society where the ripple effects of these early formations of business fail to build in the female perspective.

The Economist recently published a story highlighting how the competitive gene of men that was needed to "get the girl” may still be lurking in the shadows in explaining the competitive and cutthroat nature of males in society and business today. What does it mean if this competitive gene was not balanced by less-competitive female genes? Perhaps men are perceived to be more successful only because their perspective was more prominent in developing the notion of business and industry rather than or perhaps complementary to women’s self-limiting views or stereotypes against women as the WSJ article concludes.

Another more recent study found that the male sex drive is at the root of most of the world's biggest conflicts from gang violence to world wars. Whereas women tend to befriend when they are exposed to unfamiliar faces, men are more likely to use violence. Study authors associated this finding with the male evolutionary need to boost his chances of reproducing and the fact that men have a stronger sense of group identity. Now imagine what happens when you have a disproportionate amount of men in powerful positions such as the head of countries, empires, corporations, sport-teams, gangs and religious groups. This study implies that competing countries, teams, businesses, etc. are perceived as a substantial threat to his chances of remaining in power for what used to be reproduction but is now domination.

France is in the process of making it law by 2016 that companies have at least 40% women sitting on the board. There are of course plenty of reasons put forward to oppose this law such as the opinion that women don’t have the expertise and knowledge built over time to play these roles. But are we forgetting that perhaps there isn’t a supply of women because they don’t want to take on these roles? If the business world was developed and predicated on a very male dominating decision-making process, why would women be drawn to play such a role? And even if they were, wouldn’t they need to forego some of their values and perspective to succeed in this role? Perhaps the women pioneers will create a social movement in business that will attract more women and slowly change what business is all about.

Even still, gender inequality in business may indeed represent an important explanation when understanding the unethical behaviour of business over the last few decades. I recall reading a few years back that opposing genders of a given species represent balancing mechanisms and that if there is an imbalance in gender strength, serious side effects result. Could we then conclude that if both genders in humanity are not equally prevalent in society, negative effects like corruption, greed, climate change, and social inequity begin to emerge? Does the negative behaviours of businesses like Enron and Goldman Sachs exist because the whole notion of business was predicated on the personality traits of one gender which dominated another? Do they exist because the underlying logic of business excluded women in the early formative years and today excludes them in powerful positions because they are not interested in playing these roles or because the corporate logic is incommensurable to women? Not only are there not enough women in these positions but even in these positions women are molded to fit a system created at a time that excluded their input. This arguably snuffs their important perspective from balancing those of the opposing gender.

So what does this mean? Perhaps it suggests that ensuring more women are put in leadership positions is not the answer unless doing so influences the very purpose of business. Is that even possible? Or is there simply too much inertia that women can only be successful by adopting the behavioural traits of their male counterparts to best fit into the system?

2 comments:

According to an article that ran in the Washington Post last year entitled: “Fixing the Economy? It’s Women’s Work” the authors refer to an Ernest & Young study that suggests companies with more female senior managers are more profitable. While corporations may want more females in leadership roles, a significant number of female MBAs are opting out of the labour force to become stay-at-home moms. These women are postponing their careers in part due to the need for a shift in corporate policies and social norms to provide more flexibility and fewer demands for travel.

With the current lack of certainty in the business climate, perhaps it’s more astute in terms of time, money and energy to be a stay-at-home mom rather than face the world wearing Prada, devil-horns and thick-skin?

A few studies have been done over the past few years that attempt to place a dollar value on the work that women traditionally do in the home that remains unpaid. I recall that one study in the U.S. estimated that if homemaking tasks were contracted out over the course of a year they would cost upwards of $60,000. The extreme under valuation of “domestic engineering,” despite the critical role it plays in our economy, may in part motivate women to join the workforce.

The values and perspectives of some women are exactly what compel them to excel in leadership roles within a traditionally male-dominated arena. Some do enjoy the excitement and charge of “the game,” winning and power and women with such characteristics are mentoring junior female executives. These ladies work to influence out-dated policies and have spurred on new social movements in business (i.e. “womenomics.”) to achieve more gender balance in organizations.

In terms of the cutthroat dynamics that seem to permeate the business world, such tactics stem from base survival instincts for dominance and submission. The laws that govern employment relationships in North America are inherited from the common law of “master and servant.” In Canada, women were not considered to be legal “persons” until Henrietta Muir Edwards took her case to the Supreme Court of Canada in 1930. Until then, women could not legally vote, run for office or hold the title or deeds to property and effectively were considered chattels of their fathers or husbands.

In some sectors, remnants of these conventions still linger and influence how women are valued. While some women can be self-limiting, glass ceilings unfortunately still exist in many companies. So while creating more favourable polices that support female leaders are part of the solution, the conventions (especially unstated ones) can have a powerful influence on how likely a female leader is to succeed. For example, when Sherron Watkins voiced her opinions about unethical accounting, she was expediently relegated to a small office in the basement. While not as high-profile, this sort of behaviour is the status quo in many companies.

Creating opportunities for women to hold power in corporate decision-making could provide the catalyst for creating higher standards of care and ethics in corporations. As a result the recent global financial crisis, corporations are appealing to females to mitigate the effects of reckless risk-taking, instill long-term planning and provide a healthy balance of conservatism. This recent call for a ‘woman’s touch’ to due diligence is intriguing because when examined closely, it is consistent with traditional and rigid gender roles in which females fulfill the social role of the “moral guardian,” and act as an evolutionary gatekeeper. Based Christian doctrine, this style moral code holds only females to the highest level of moral standards on the belief that divine morality is inherent to the female character. Perhaps this potentially fallacious believe is risky in itself?

For fun, here’s a parody of the traditional limitations placed on: http://www.youtube.com/watch?v=jLYc6tMbPHk